Insights into the Unveiled English Translation of Dutch Transfer Pricing Decree 2022 

August 14, 20230


The Dutch tax landscape has recently witnessed a significant development with the release of an unofficial English translation of the Transfer Pricing Decree 2022, which took effect in July of the preceding year. This pivotal document holds paramount importance for tax professionals and investors as it outlines the nuanced approach to transfer pricing, emphasizing flexibility in the domain of determining transfer prices. In this comprehensive analysis, we delve into the intricacies of the Transfer Pricing Decree, shedding light on its key provisions and implications.  


A Flexible Approach to Transfer Pricing  

Acknowledging the intricate nature of transfer pricing, the Transfer Pricing Decree sets forth a pragmatic stance, recognizing that applying transfer pricing rules is not a one-size-fits-all endeavor. Instead, it underscores the significance of a flexible and realistic approach when tax officials engage in the intricate task of ascertaining transfer prices. This resonates with the recognition that transfer pricing is an art as much as it is a science. 


Embracing the Arm’s Length Principle  

The core of the Transfer Pricing Decree revolves around the arm’s length principle, which finds its roots in the OECD Transfer Pricing Guidelines. The decree readily embraces the OECD Transfer Pricing Guidelines as an internationally accepted interpretation of this foundational principle. Underpinning this stance is the understanding that a harmonized approach to transfer pricing facilitates consistency across international transactions.  


Unveiling the Transaction’s Essence  

Before delving into the specifics of transfer prices, the Transfer Pricing Decree emphasizes the prerequisite of characterizing the transaction itself. This entails a meticulous analysis of the economically relevant attributes of the transaction. This pivotal step ensures a comprehensive understanding of the transaction’s context, enabling a more accurate determination of transfer prices.  


The Role of Multi-Year Data  

The decree recognizes the value of utilizing data spanning multiple years in the evaluation of a transaction. This approach serves to prevent adjustments that may not be aligned with the arm’s length principle when evaluated on an isolated annual basis. By considering a broader timeframe, the involved parties can better ensure that compensation aligns with the principle’s essence.  


Freedom in Transfer Pricing Methodology  

The Transfer Pricing Decree affirms the taxpayer’s prerogative to select a transfer pricing method. This choice, however, comes with the precondition that the chosen method ultimately yields an arm’s length result for the specific transaction. This recognition of methodological autonomy underscores the diversity of scenarios and variables that encompass transfer pricing.  


Preferred Transfer Pricing Methodology  

Given the challenges inherent in applying the comparable uncontrolled price (CUP) method, the decree underscores the prevalence of the transactional net margin method (TNMM). The TNMM’s popularity stems from its adaptability and applicability, especially in scenarios where comparable uncontrolled transactions are scarce.  


Comprehensive Guidance  

The Transfer Pricing Decree extends its scope to cover various intricacies in the domain of transfer pricing. From secondary adjustments to hard-to-value intangibles, intra-group services, cost contribution arrangements, financial transactions, guarantees, and transfer pricing documentation, the decree provides comprehensive guidance to navigate these intricate terrains.  



The availability of the unofficial English translation of the Dutch Transfer Pricing Decree 2022 marks a significant stride in the tax arena. This in-depth exploration of the decree’s tenets underscores its relevance for tax professionals, investors, and businesses operating on an international scale. As the intricacies of transfer pricing continue to shape cross-border transactions, an adept understanding of the Transfer Pricing Decree is instrumental in ensuring compliance and informed decision-making. 

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